Holy cow, that's huge. Fables is a very well-beloved universe, good on him for giving it to the public. I hope this opens the door for an adaptation of the comics. Alan Moore would be proud.
It's a shame that it's even considered "radical" since it's basically a copyright holder upholding their end of the bargain in the promise behind the origin of copyright. To incentivize creative content, a creator is given sole ability to monetize it for a fixed period of time. In return for that protection, the public gets it at the end of the term. Today's copyright is so far off course that it defeats the intent. There's no incentive to create anything new if you can keep milking existing content. And the public never gets a return for offering that protection.
You're free to create stories, video, of your own video game in the universe. If you chose to make that public domain and give it away for free, then good on you.
Others can create freely in this universe with their own expression, which they could charge for.
Much like how there are movies about Cinderella or Red Riding Hood which are under copyright, but the base story itself is in the public domain and free to use.
The author has relinquished his copyright on the Fables universe. Every work based on it has its own copyright, however.
So while you can make your own stories in the Fables universe, it doesn't mean that things like The Wolf Among Us game from Telltale have had their copyrights affected in any way.